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Social Climate Fund. How to protect households from rising energy prices?

Jakub Sokołowski and Joanna Mazurkiewicz
Authors registered in the RePEc Author Service: Jakub Sokolowski

No 02/2025, IBS Policy Papers from Instytut Badan Strukturalnych

Abstract: The new carbon tax (ETS2) will increase the cost of heating with coal and gas starting in 2027. Rising energy prices raise concerns about a growing risk of energy poverty. The Social Climate Fund is intended to protect vulnerable households from excessive price increases. It will finance direct transfers and investments aimed at reducing energy consumption, such as thermal retrofits. We show that the risk of energy poverty will increase after the introduction of ETS2, even if thermal retrofitting investments are implemented. Therefore, direct transfers will be necessary. The budget of the Social Climate Fund will be sufficient to ensure that transfers protect low-income households from excessive energy price increases.

Keywords: Social Climate Fund; energy poverty; ETS2 (search for similar items in EconPapers)
JEL-codes: D63 H23 I32 Q48 (search for similar items in EconPapers)
Pages: 4 pages
Date: 2025-06
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